Compulsory liability insurance: rental car insurance payouts made simple
Compulsory liability insurance, third-party liability insurance, collision coverage… Have you ever had a rental counter walk you through all of these insurance options? And after all those explanations, how much of it did you actually understand?
Today we’re going to explain, in the simplest way possible, one of the key parts of rental car insurance: compulsory liability insurance.
Compulsory liability insurance: where it came from
Where compulsory liability insurance came from:Under Taiwan’s road laws, not every vehicle was originally required to carry insurance. Compulsory liability insurance came about after a tragic traffic accident, and it was championed by Mrs. Ko, a mother who lost a family member in that crash. The “Compulsory Automobile Liability Insurance Act” passed its third reading in the Legislative Yuan on December 13, 1996!
Compulsory liability insurance: the basic idea
Compulsory liability insurance makes sure that a driver who causes an accident is able to “compensate other people” — not themselves. And it only covers bodily injury, not property damage. ▼
When it comes to rental car insurance, every vehicle is covered by compulsory liability insurance.
But what exactly does “compulsory” cover in a rental car insurance policy?
Case A: When it rains, it pours
Let’s say Driver A rents a car for a trip and, very unluckily, hits Driver B, who is out making deliveries. ▼
Most people would assume only Passenger A can claim compensation under compulsory liability insurance, right!? ▼
Wrong! Wrong! Wrong!
In fact, all three of them can receive compensation!
Driver A can file a compulsory liability insurance claim with Car B’s insurance company.
Passenger A can file a compulsory liability insurance claim with either Car A’s or Car B’s insurance company.
Driver B can file a compulsory liability insurance claim with Car A’s insurance company.
Case B: Rental car to Busan
Driver A is speeding down the road to Busan, trying to escape a horde of zombies, loses control and slams into a tree by the roadside! ▼
In this case, only Passenger A can file a compulsory liability insurance claim with Car A’s insurance company.
That’s because, in rental car insurance, compulsory liability insurance is not there to compensate the driver themselves! Zombies are terrifying!!! ▼
The scope of claims under compulsory liability insurance is very broad: regardless of whether the at-fault party was negligent, and whether the accident left the victim injured or disabled, a claim can be filed with the insurance company. ▼
Also, compulsory liability insurance is like national health insurance — it’s the basic level of protection set by the government (NT$2 million for death or disability, NT$200,000 for medical expenses).
But in an actual accident, the amount paid out by compulsory liability insurance is often not enough.
If you’re insuring your own car, it’s generally a good idea to add third-party liability insurance as well. ▼
Finally, one more reminder: insurance really matters when you rent a car, so don’t overlook your own rights! ▼
Updated September 2020:
A while back we received a lot of questions along the lines of, “What can I do to get more protection when I rent a car?”
There are now insurance companies in Taiwan offering rental car insurance billed by the day. Here’s a summary for your reference!
| Product | Ji Shi Bao (Timely Protection) | Rental Car Travel Accident Insurance | |
|---|---|---|---|
| Insurance company | Tokio Marine Newa Insurance | Mingtai Fire & Marine Insurance | |
| Scope of cov erage | Covered driver | Only the policyholder | Only the policyholder |
| Accident situations | Collisions with other vehicles | Collisions, rollovers and similar accidents involving another person’s car | |
| Your own vehicle | No deductible; pays up to NT$200,000 | Deductible: NT$5,000 per accident; pays up to NT$300,000 | |
| Other party’s vehicle | Pays up to NT$500,000 | Pays up to NT$100,000 | |
| Your own injuries | None | Yes | |
| Injury to passengers in your car | No | No | |
| Injury to the other party | Up to NT$2 million per person, and up to NT$20 million per accident. | Up to NT$1 million per person, and up to NT$2 million per accident. | |
| Other | No | Towing fee subsidy | |
| Price range | NT$107–NT$568 / day | NT$289–NT$418 / day | |
| Earliest effective time | Takes effect at the next full hour. For example, at 10:15 on 1/1 you can choose 12:00 on 1/1 as the start time | Takes effect at the full hour two hours later. For example, at 10:15 on 1/1 you can choose 13:00 on 1/1 as the start time | |
| Policy details | 吉時保 (Jishibao) | Car rental travel insurance Click here to view |
If this helped you understand car rental insurance, feel free to share! ▼
Read more articles about insurance:
👉[2026 Update] The complete guide to car rental insurance in Taiwan: coverage and price comparison in one read!
👉Travel insurance picks | 2026 travel accident and travel inconvenience insurance: coverage and claim rules at a glance!
👉Car rental insurance: how collision coverage pays out, explained in seconds
Looking for a rental car?
Head over to gogoout
Worried about spending hours trying to pick a rental company, with unclear vehicle information and vague insurance details holding you back from booking?
↓↓↓ Enter your dates and times below to see rental cars all over Taiwan ↓↓↓
gogoout offers the most transparent rental information, so you can book a car in three minutes!
This article was translated by AI from the original Chinese version.
